During the second half of 2016, the cartel expects non-OPEC supply to fall by 140,000 barrels a day from its level in the first half of the year and almost a million barrels a day below 2015’s level.
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Baku, Fineko/abc.az. In today’s monthly report the Organization of Petroleum Exporter Countries (OPEC) said that oil supplies from Azerbaijan to the world market declined by 20,000 bpd to average 870,000 bpd in April 2016.
Falling supply and rising demand “should result in a more balanced oil market toward the end of the year”.
While oil’s rapid rebound has drawn plenty of concern and calls for a near-term pullback, other market observers see more upside on the way for crude, particularly as supply disruptions and the USA summer driving season kick in.
“There is no doubt that the oil price has gone up faster than our expectation but I think we will hear a lot more talk now about prices hitting $55 or even $60 mark till the end of the year”, Mihir Kapadia, chief executive officer of Sun Global Investments, told Khaleej Times.
“The excess supply in the market is likely to ease over the coming quarters”, the group said in its June report.
Falling US inventories and production and the impact of wildfires in Canada curbed supply, as did rebel attacks in Nigeria and an oil refinery strike in France.
In the meantime, the organization projects global economic growth to amount to 3.1 percent for this year. With signs the strategy is working, OPEC at a June 2 meeting made no change to its output policy.
Coal demand in China has slid as its economy slows and shifts toward consumer-led growth, while the government seeks to cut industrial oversupply and curb pollution.
But inventories are high and OPEC cautioned: “Nevertheless, there is still a massive global supply overhang”. It projected that demand for Opec crude in the latter half of 2016 was expected to average 32.6 million bpd, giving the group room to expand its current oil output.
The Opec’s reference price for May averaged $43.21 a barrel, a gain of $5.35 compared to the previous month.
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Using secondary sources, OPEC estimated that output from its 13 members fell by 99,800 b/d to 32.361 million b/d in May from 32.461 million b/d in April as production rises in Kuwait, Iran and Saudi Arabia, were offset by steady falls in Nigeria, Venezuela and Iraq.
